William P. Lauder on the Lipstick Index
Leonard A. Lauder coined the term “lipstick index” in 2001, when lipstick sales spiked despite a widespread recession. As he crunched the numbers, he realized that historically, sales of beauty products increased during tough economic times — as during the Great Depression, for example, when cosmetics sales increased almost 25 percent.
But in the age of the coronavirus, all bets are off.
Today may be National Lipstick Day, but makeup sales are suffering in the age of the mask, particularly lipsticks, with volume down as much as 25 percent in some channels, according to industry data.
“We’re dealing with unprecedented times,” said William P. Lauder, today the executive chairman of the Estée Lauder Cos. Inc. and who was group president of the business in the early Aughts.
“In previous economic recessions, most people’s everyday lives were impacted, but the overall way they interacted with others and led their lives didn’t change fundamentally. We’re now in a situation where we are being advised about staying away, being careful about shopping. It is difficult to say when or what our habits will be when it comes to the new normal and what that new normal will be.”
While Lauder isn’t seeing a spike in the lip categories, other areas of the business are more robust. Skin care — particularly hero products — are performing well, with categories like facial masks surging; in makeup, concealers, shadows and brow products are also trending, he said.
“We could talk about a ‘mascara index’ or ‘nail polish index,’” said Lauder, “but I wouldn’t call it a hard and fast mathematical correlation. It’s more anecdotal.”
What is certain is that whatever products consumers are looking for, the buying experience they will encounter will look very different. For one, Lauder expects the acceleration in online sales to continue even as stores reopen, a dynamic that will change expectations around a brick-and-mortar experience, too.
“How do we give consumers the high-touch experience without touching them? It’s not that easy,” he said. “Touch is not just a physical manifestation. It’s also the high level of service and education and experience that consumers expect. We have to find ways to connect with consumers, virtually and in-store, and enhance their experience in a way that makes it worth their time.”
As for Lauder himself, he’s sheltered in place at home, and while he freely admits there are worse places to be, he misses the daily interaction with his teams, despite frequent Zoom meetings. “I miss the give-and-take of being in a meeting together, having conversations, laughing with people,” he said. “It’s a whole different world, and we’re going to have to get used to it.”
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